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What's in Store for Varian Medical (VAR) in Q2 Earnings?
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Varian Medical Systems Inc.’s second-quarter fiscal 2020 results are scheduled to release on May 4, after market close. In the last reported quarter, the company’s earnings missed estimates by 4.1%. It has a positive surprise 0.6% for the trailing four quarters, on average.
Let’s take a look at how things are shaping up prior to this announcement.
Q2 Estimates Picture
Currently, the Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $780.3 million, suggesting growth of 0.1% from the year-ago number. The same for adjusted earnings per share (EPS) stands at $0.8, indicating a year-over-year fall of 20%.
Key Catalysts
Varian’s solid Oncology platform is expected to have driven fiscal second-quarter performance. Particularly, the Protons Solutions business is likely to have driven growth during the quarter.
Notably, Varian’s key radiotherapy solutions — Eclipse and TrueBeam — are currently seeing robust demand from healthcare vendors.
Recently, the company was selected by Penn Medicine to install an additional ProBeam 360° system in a single-room configuration at the Lancaster General Health Ann B. Barshinger Cancer Institute.
The Eclipse Treatment Planning software and ARIA Oncology Information system have been recently picked by China Medical University Hospital in Taiwan along with its ProBeam 360° system.
However as the impact of the coronavirus pandemic intensified around late-February, overall revenues within the Oncology segment are expected to have been impacted during the quarter.
Varian Medical Systems, Inc. Price and EPS Surprise
The Halcyon Platform is also expected to have contributed to sales in the to-be-reported quarter.
The CTSI acquisition, which was integrated into the Oncology unit in 2019, is expected to have continued contributing to the topline during the fiscal second quarter. Moreover, with the takeovers of Endocare, Alicon and Boston Scientific’s microspheres portfolio, Varian has likely strengthened its Interventional Oncology Solutions arm during the to-be-reported quarter.
In January 2020, the company signed an agreement with Massachusetts General Hospital for seven Varian radiotherapy systems. While five of the systems will replace non-Varian systems, one will replace an existing Varian system and another one will be installed in a new vault.
In December 2019, the company received an order for seven TrueBeam machines with six IDENTIFY systems at the National Cancer Center in Singapore. The company also received an order for one Edge system and two VitalBeam systems at the National University Hospital, Singapore.In Brazil, the company received eight orders for Halcyon in the first fiscal quarter. Varian has also been cementing its leadership position in China lately.
These developments are expected to get reflected in the fiscal second-quarter performance.
However, Varian has been facing headwinds in Japan which are likely to have impacted the company’s APAC revenues in the to-be-reported quarter.
What Our Quantitative Model Suggests
Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here as you will see.
Earnings ESP: Varian has an Earnings ESP of -7.32%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this time around.
Aphria Inc. has an Earnings ESP of +35.71% and a Zacks Rank #2.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank of 2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
What's in Store for Varian Medical (VAR) in Q2 Earnings?
Varian Medical Systems Inc.’s second-quarter fiscal 2020 results are scheduled to release on May 4, after market close. In the last reported quarter, the company’s earnings missed estimates by 4.1%. It has a positive surprise 0.6% for the trailing four quarters, on average.
Let’s take a look at how things are shaping up prior to this announcement.
Q2 Estimates Picture
Currently, the Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $780.3 million, suggesting growth of 0.1% from the year-ago number. The same for adjusted earnings per share (EPS) stands at $0.8, indicating a year-over-year fall of 20%.
Key Catalysts
Varian’s solid Oncology platform is expected to have driven fiscal second-quarter performance. Particularly, the Protons Solutions business is likely to have driven growth during the quarter.
Notably, Varian’s key radiotherapy solutions — Eclipse and TrueBeam — are currently seeing robust demand from healthcare vendors.
Recently, the company was selected by Penn Medicine to install an additional ProBeam 360° system in a single-room configuration at the Lancaster General Health Ann B. Barshinger Cancer Institute.
The Eclipse Treatment Planning software and ARIA Oncology Information system have been recently picked by China Medical University Hospital in Taiwan along with its ProBeam 360° system.
However as the impact of the coronavirus pandemic intensified around late-February, overall revenues within the Oncology segment are expected to have been impacted during the quarter.
Varian Medical Systems, Inc. Price and EPS Surprise
Varian Medical Systems, Inc. price-eps-surprise | Varian Medical Systems, Inc. Quote
The Halcyon Platform is also expected to have contributed to sales in the to-be-reported quarter.
The CTSI acquisition, which was integrated into the Oncology unit in 2019, is expected to have continued contributing to the topline during the fiscal second quarter. Moreover, with the takeovers of Endocare, Alicon and Boston Scientific’s microspheres portfolio, Varian has likely strengthened its Interventional Oncology Solutions arm during the to-be-reported quarter.
In January 2020, the company signed an agreement with Massachusetts General Hospital for seven Varian radiotherapy systems. While five of the systems will replace non-Varian systems, one will replace an existing Varian system and another one will be installed in a new vault.
In December 2019, the company received an order for seven TrueBeam machines with six IDENTIFY systems at the National Cancer Center in Singapore. The company also received an order for one Edge system and two VitalBeam systems at the National University Hospital, Singapore.In Brazil, the company received eight orders for Halcyon in the first fiscal quarter. Varian has also been cementing its leadership position in China lately.
These developments are expected to get reflected in the fiscal second-quarter performance.
However, Varian has been facing headwinds in Japan which are likely to have impacted the company’s APAC revenues in the to-be-reported quarter.
What Our Quantitative Model Suggests
Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here as you will see.
Earnings ESP: Varian has an Earnings ESP of -7.32%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this time around.
Aurora Cannabis (ACB - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aphria Inc. has an Earnings ESP of +35.71% and a Zacks Rank #2.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank of 2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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